Interfoto Pictures v Stiletto Visual Programs

(1989) QB 433

Overview

The case considered effective incorporation of terms into a contract. Terms were alleged to have been incorporated through delivery notes which included a clause stipulating a hefty late payment in relation to loaned photographic transparencies.

The Court held that to incorporate terms reasonable steps must be taken to draw the other party’s attention to the printed conditions. Where a condition is particular onerous or unusual, the party seeking to enforce it must show that it was fairly brought to the other’s attention. That was not the case here - the relevant clause could not be relied upon.

Facts

Stiletto ordered 47 photo transparencies from Interfoto’s photographic library (to borrow and possibly use in their business). These were sent, together with a delivery note containing certain conditions. It provided, in clause 2, for a payment of £5 per day for each transparency held beyond 14 days.

Stiletto did not read the conditions. They returned the photo’s almost two weeks late. Interfoto claimed £3,783. As a matter of fact it was determined that this was an exorbitant sum (it was held that £3.50 per week would have been reasonable), but one calculated in accordance with terms of delivery note.

Interfoto succeeded at first instance; Stiletto appealed.

Held

Lord Justice Dillon

The issue was whether clause 2 sufficiently brought to Stiletto’s attention to make it a term of the contract? His Honour noted this was a very ‘onerous’ clause and that the defendants could not have known that such an exorbitant rate would be imposed for retention of the transparencies if their attention was not drawn to the clause. The following extract is particularly important:

At the time of the ticket cases in the last century it was notorious that people hardly ever troubled to read printed conditions on a ticket or delivery note or similar document. That remains the case now. In the intervening years the printed conditions have tended to become more and more complicated and more and more one-sided in favour of the party who is imposing them, but the other parties, if they notice that there are printed conditions at all, generally still tend to assume that such conditions are only concerned with ancillary matters of form and are not of importance. In the ticket cases the courts held that the common law required that reasonable steps be taken to draw the other parties' attention to the printed conditions or they would not be part of the contract. It is in my judgment a logical development of the common law into modern conditions that it should be held … that, if one condition in a set of printed conditions is particularly onerous or unusual, the party seeking to enforce it must show that that particular condition was fairly brought to the attention of the other party. [emphasis added]

Thus, what is required is that reasonable steps be taken to draw the other party’s attention to the printed conditions. In this connection, if a condition is particular onerous or unusual, the party seeking to enforce it must show that it was fairly brought to the other’s attention. In this case, unless brought to their attention, Stiletto was entitled to believe that the terms were ‘merely ancillary and not of great importance.’ This did not occur here so Interfoto could not rely on clause 2.

[If] one condition in a set of printed conditions is particularly onerous or unusual, the party seeking to enforce it must show that that particular condition was fairly brought to the attention of the other party.

This was not done here. Interfoto could recover only a reasonable sum on a quantum meruit (not pursuant to the contract).